Lehigh Valley microbrewers growing with demand

Tyrone Richardson, OF THE MORNING CALL

Lehigh Valley microbrewers Weyerbacher Brewing Co. and Fegley's Brew Works are installing more equipment and adding workers to keep pace with a growing demand for their ales, lagers and seasonal blends, owners said.

The two family-owned breweries are part of a national trend of microbrewers who are expanding operations to keep up with burgeoning consumer demand for craft beers. An industry expert said the growth is largely due to younger drinkers seeking alternatives to mass-produced beer such as Budweiser and Coors.

"They're growing like weeds. Everybody is expanding operations," said Eric Shepard, executive editor of Beer Marketer's Insights in Suffern, N.Y. "Some brewers can't even keep up with the growth. … There's a growing number of consumers that want more flavorful beer outside of the mainstream beers."

On Wednesday, the Allentown Brew Works installed two new fermenting tanks, adding 2,400 gallons of capacity and increasing production by about 50 percent, co-owner Mike Fegley said. The brewery also recently hired two new workers, bringing its total to seven in the space it shares with the Brew Works restaurant in downtown Allentown.

"This is huge for us," Fegley said. "We're very proud of the fact that demand has dictated that we would need to expand."

Craft beer producers, a segment that includes brewers such as Samuel Adams, are defined as those with 2 million barrels or fewer sold per year.

Brew Works has teamed with Shangy's in Emmaus and other distributors to expand its beer sales roughly 100 miles from Allentown, reaching restaurants in regions such as Harrisburg, Philadelphia and parts of New Jersey, Fegley said.

Brew Works also has increased production of 12-ounce bottles to reach the shelves of more beer distributors, six-pack shops and grocers such as Wegmans, Weis Markets and Whole Foods, he added.

Weyerbacher's sales have increased 27 percent compared with a year ago, owner Dan Weirback said Tuesday.

The company's facility on Easton's Line Street added an employee this month, bringing employment to 14 full-time workers, Weirback said. He added that the company has installed three new fermenters, increasing beer production by about 35 percent. Other equipment, including new bottling machines, will be added this year.

Weirback said beer festivals and recent awards have helped boost the brand.

"There is more brand awareness," Weirback said. "People are getting to know our beer and they want to try them all."

The craft beer industry accounts for a mere 5 percent of the volume of beer sold, but experts say it's the one bright spot in the beer market, which reported lackluster sales due to high unemployment and other economic woes. Overall U.S. beer sales were down 1 percent by volume in 2010, but the craft brewing industry grew 11 percent over 2009, according to the Colorado-based Brewers Association, a trade group for craft brewers.

Shepard said the craft beer industry has "snowballed over the last two or three years," with roughly 600 brewers planning to join the ranks. There were roughly 1,700 different craft brews in the U.S. in 2010, according to the Brewers Association.

Larger craft brewers such as Samuel Adams, which makes beer at its facility in Upper Macungie Township, are reporting strong sales this year. The Boston company reported that its first quarter yielded a net revenue of $102 million, an increase of $8.1 million over the same year, primarily due to shipment volume gains.

Victory Brewing Co. of Downingtown, Chester County, is on track to have a "record-breaking year," company spokeswoman Karen Noonan said.

She said sales were up 30 percent in April compared with the same month a year ago. The company has also expanded distribution to Florida and recently added about 10 workers at its Downingtown brewery.

"It seems that people have become more educated about beer, and their tastes are developing with that education," Noonan said. "The general beer-consuming public is evolving, and people are really craving more flavorful and interesting beers. That encourages us to be creative to meet their expectations and demands."

And the demand has trickled down to those peddling the suds. Link Beverages in Coopersburg is rearranging store space to add more craft brews, owner Skip Link said.

"We have expanded immensely the amount of floor space and we are continuing to do so as the trend is in that direction," Link said. "Years ago people would walk in and just ask, 'Where's my Budweiser?' … Today somebody will walk in asking if we have Victory Golden Monkey, and they'll come in and try names like Weyerbacher."

Beer wholesaler and distributor Shangy's has added 10 workers this year to keep pace with the popularity of its craft beer sales and distribution to nearly 2,000 accounts, which includes restaurants, hotels and festivals, manager Nima Hadian said.

"The beer market has shifted and the craft industry as a whole has done a good job educating people, and they're so beer-savvy because they're going to beer festivals and samplings," he said.

Hadian pinned part of Shangy's business growth on restaurateurs replacing taps of Budweiser, Miller and other mass-produced names with craft brewers.

That appeals to drinkers such as Michael Hitcho of Hanover Township, Northampton County. The 32-year-old insurance agency owner said he likes craft beers in part because of the many different tastes and "the quality of the ingredients that are used to brew."

"It's fun. My friends and I enjoy spending time together drinking new beers at the local places in the Valley that cater to beer connoisseurs," he said. "We also enjoy beer tastings and bar crawls in local cities like Philly and New York."